Verizon Eliminates Contracts and Device Subsidies
by Brandon Chester on August 7, 2015 2:58 PM EST
North America has always had a fairly unique pricing structure for buying mobile devices. In many places, the concept of purchasing a device for a heavy subsidy and committing to stay with a given carrier for two or three years is unheard of, but in the United States and Canada it has always been the norm. However, that dynamic has been changing as it has become more difficult for operators to subsidize expensive smartphones for the wide market of consumers. Both T-Mobile and AT&T have moved away from the original model of contracts and subsidies in favor of installment plans or simply selling devices at full price, and today Verizon announced that they will follow in their footsteps.
With Verizon's new plans, there are no more contracts and no more device subsidies. Instead, consumers pay for their phones, pay for a bucket of data, and then pay a fee for each device that they add onto the account. The base monthly data fees are 1GB for $30, 3GB for $45, 6GB for $60, and 12GB for $80. On top of the data bucket fee, users will pay $20 to add a smartphone to the account, $10 for a tablet/data stick, and $5 for a smartwatch with cellular capabilities. Additional data over the limit will cost $15 per gigabyte,
As for existing consumers, Verizon will apparently offer avenues for them to get another subsidized device when they transition to these new plans, and they can also hold onto their older plans if they desire. Verizon customers interested in the new plans can switch over when they go live on August 13.
Source: Re/code
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crimson117 - Friday, August 7, 2015 - link
Why not? AT&T (their biggest competitor) does...Impulses - Saturday, August 8, 2015 - link
And they do it in such an asinine way that it's worthless... Data that rolls over on AT&T expires after one month, and your monthly allotment is always used before the rollover, so you get to use the rollover maybe once or twice a year at best (if you're going over/under every other month you have a pretty weird usage pattern).Morawka - Sunday, August 9, 2015 - link
i make sure i use my att rollover by hooking it up to my pc via mobile hotspot, and download large files, or do large scale photo backups.. i peg the upload to the max for all my rollover bandwidth.. i'm sure att hates me for using up all their upstream bandwidth, but I'm glad i could stick it to them :)Vepsa - Friday, August 7, 2015 - link
Verizon not standing between device manufactures & users for updates? Yeah right, that will never happen. They need to get their crapware in place (on Android devices that is).webdoctors - Friday, August 7, 2015 - link
This is big bad news for Samsung and Apple. Once consumers have to pay full price for their devices they'll gravitate to reasonably prices phones like the Moto G, Zenfone 2, etc. under $199.To Joe sixpack its not easy to show why one black rectangle is $600 and another is $200 when they run the same apps at the same screens and speeds.
Does anyone have stats on how sales differ in Europe vs. N.America where folks have been paying non subsidized prices for years? Guess if Apple dominates in Europe than this will be a non-issue.
ingwe - Friday, August 7, 2015 - link
Very interesting point. I suspect you are correct, but I am curious how things will actually work.Morawka - Friday, August 7, 2015 - link
apple and device makers will start subsidizing them lol. by getting kickback from the carrierImSpartacus - Friday, August 7, 2015 - link
Honestly, I'm struggling to see an appreciable difference between these new "budget" phones and halo phones.Occasionally you see something like the s6 active that has a large battery and a waterproof chassis, but it feels like it's all the same.
Flunk - Friday, August 7, 2015 - link
Those top-end phones are woefully overpriced. Without the benefits of contracts hiding the price I can't see many of them selling. Why spend $700 on a Galaxy S7 when a Moto G/Zenphone2 is $200. I really can't see any reason to price any phone over $400, you can get phones that compete with the maxi-priced phones in the $400 range now anyway.Anyone else notice that their data prices are still horrible? Take away the contract and pocket the savings? Shameful.
dark4181 - Friday, August 7, 2015 - link
I foresee a price drop coming with the high end devices. Heck, even a $130 price drop (what Apple charges for the cellular radio) and a reduction in memory upgrade pricing would be a big equalizer. I suppose it will depend on whether sales numbers drop when folks realize how much a high end phone REALLY costs.